Category: United States

The Pendulum Swings Towards a Mid-Year Rate Hike

The US employment report was nothing shy of spectacular.  Job growth was better than anticipated. Back months had higher revisions. Earnings growth recouped the December fluke. The participation rate jumped. It is true that the unemployment rate and the underemployed edged higher. Yet, on balance, those who doubted a mid-year Fed hike have to reconsider.

U.S. Economy Worsens Before GDP Report

The Federal Reserve is seeing worsening economic conditions in the United States shortly before the government releases its latest report on the country’s GDP.

The Dallas Federal Reserve announced a decline in manufacturing activity and a lower outlook for economic growth in Texas, with general business activity hitting negative territory for the first time in almost two years. That index fell to -4.4 in January, down 7.9 points from the prior month and 9.4 points year-over-year.

Low Debt, Unemployment Prompt U.S. Enthusiasm

A fall in consumer-held debt and a rise in job openings are prompting greater enthusiasm in a strengthening U.S. economy, emboldening small business owners and workers.

Oil Continues to Fall on Slowing Global Growth Fears

Oil futures fell over 4% on Monday morning as worries mount that economic growth is slowing around the world.

In the U.S., WTI futures expiring in February fell over 4% to $46.41, while Brent futures fell 4.5% to below $48. Oil futures have fallen 20% in the past month, after WTI futures fell to less than $60, which many analysts said was unsustainably low.

U.S. Employment Gains Drive Growth Expectations

A higher employment rate in the United States is encouraging more aggressive growth expectations from economists, while global growth expects to lag.

Economists are becoming more aggressive in their GDP targets, with several investment banks raising growth forecasts after the Commerce Department announced GDP growth rose to 5% in the United States in the third quarter of 2015.

Rate Rise Unlikely on Shrinking Deficit, Employment Gains

The Federal Reserve believes a rise in interest rates is unlikely before April.

Notes for the latest Federal Open Market Committee state that the Federal Reserve sees low interest rates continuing throughout the first quarter of this year, despite expectations from a year ago that a rate hike would come early in 2015. “Most participants thought the reference to patience indicated that the committee was unlikely to begin the normalization process for at least the next couple of meetings,” the Committee stated in its meeting minutes.

The Part-Time Economy Consuming America

Workers on the U.S. west coast are experiencing serious challenges when it comes to landing a full-time job. This is forcing millions of Americans to languish in part-time positions, because there are no other options available. In the state of California alone, over 1.2 million people are underemployed. In total, that number equates to the same population of Oakland and San Francisco.

Some people wonder why you would live in a state that is so anti-business. This is what California has done to itself and they just raised taxes.

U.S. Services Demand Falls Despite Cheaper Oil

Despite hopes that cheaper oil would encourage more spending on other goods and services, non-manufacturing fell to its lowest growth rate since June.

Demand for non-manufacturing services in the United States, fell to 56.2 in December, lower than 59.3 in November. The employment index also fell to 56 from 56.7 in the prior month.

End-of-Year Bears Spoil S&P 500 Rally

The S&P 500 erased its gains for December on the last day of 2014, as soft economic data brought greater uncertainty over America’s economic recovery.

The index of American stocks fell 1% by the end of trading, ending the year up over 11%, while the Dow Jones Industrial large-cap index lost 0.9%. Volumes were 25% below recent averages, indicating light activity in the market.